Victory Liner, Inc. v. Rosalito Gammad, et al.

The award of compensatory damages for the loss of the

G.R. No. 159636, 25 November 2004 deceased's earning capacity should be deleted for lack of basis. As a
rule, documentary evidence should be presented to substantiate the
Facts: claim for damages for loss of earning capacity. By way of exception,
Marie Grace Pagulayan-Gammad, respondent Rosalito’s damages for loss of earning capacity may be awarded despite the
wife, was on board a Victory Liner bus bound for Tugegarao from absence of documentary evidence when (1) the deceased is self-em-
Manila. The bus was running at a high speed and fell on a ravine ployed earning less than the minimum wage under current labor laws,
somewhere in Santa Fe, Nueva Vizcaya, which resulted in the death and judicial notice may be taken of the fact that in the deceased's line
of Marie Grace. of work no documentary evidence is available; or (2) the deceased is
employed as a daily wage worker earning less than the minimum
Respondents filed a complaint for damages arising from wage under current labor. In this case, the award of compensatory
culpa contractual against Victory Liner. Petitioner claimed that the
damages for loss of earning capacity was on the basis of respondent’s
incident was purely accidental and that it has always exercised ex-
traordinary diligence. testimony that Marie Grace was 39 years old and works as a Section
Chief of the BIR. No other evidence was presented. This is erroneous
The trial court rendered a decision in favour of respon-
because the deceased’s earnings does not fall within the exceptions.
dents, and ordered Victory Liner to pay the following:
(Earning capacity should be substantiated by the required documen-
tary proof.)
1, Actual Damages P122,000.00
However, the fact of loss having been established, tem-
2, Death Indemnity P50,000.00
perate damages in the amount of P500,000.00 should be awarded
to respondents. Under Article 2224 of the Civil Code, temperate or
3, Exemplary and Moral P400,000.00 moderate damages, which are more than nominal but less than com-
Damages pensatory damages, may be recovered when the court finds that
some pecuniary loss has been suffered but its amount can not, from
4, Compensatory Dam- P1,500,000.00 the nature of the case, be proved with certainty.
ages
The award of moral damages cannot be lumped with ex-
5, Attorney’s Fees 10% of the total amount emplary damages because they are based on different rural founda-
granted tions. In culpa contractual or breach of contract, moral damages
may be recovered when the defendant acted in bad faith or was guilty
6, Cost of the suit of gross negligence (amounting to bad faith) or in wanton disregard
of contractual obligations and, as in this case, when the act of breach
of contract itself constitutes the tort that results in physical injuries.
By special rule in Article 1764 in relation to Article 2206 of the Civil
On appeal, the Court of Appeals affirmed the decision but Code, moral damages may also be awarded in case the death of a
modified the award of damages: passenger results from a breach of carriage.

On the other hand, exemplary damages, which are

1, Actual damages P88,270.00 awarded by way of example or correction for the public good may be
recovered in contractual obligations if the defendant acted in wanton,
2, Compensatory dam- P1,135,,536.10 fraudulent, reckless, oppressive, or malevolent manner.
ages
P100,000.00 as moral damages is awarded to compensate
3, Moral and exemplary P400,000.00 for the death of Marie Grace resulting from Victory Liner’s breach of
contract of carriage. P100,000.00 as exemplary damages is also prop-
damages
er for Victory Liner’s failure to prove that it exercised extraordinary
diligence, it is presumed that it acted recklessly.
4, Attorney fees 10% of the actual, com-
pensatory, moral, and Actual damages damages are only the substantiated and
exemplary damages ad- proven expenses or those that appear to have been genuinely in-
judged herein. curred in connection with the death, wake or burial of the victim. In
this case, P78,160.00 is proper, which was the amount supported by
official receipts.

Cost of suit against petitioner is affirmed.
Issue:
Whether the award of damages was proper.
Ruling:
No, the award of damages was not proper. It should be
modified.
Article 1764 in relation to Article 2206 of the Civil Code,
holds the common carrier in breach of its contract of carriage that
results in the death of a passenger liable to pay the following: (1)
indemnity for death, (2) indemnity for loss of earning capacity, and
(3) moral damages.
Under Article 2208 of the Civil Code, attorney’s fees may
also be recovered where exemplary damages are awarded. The 10%
of the total amount adjudged is reasonable.
In Eastern Shipping Lines v. CA, it was held that when an
obligation, regardless of its source, i.e., law, contracts, quasi-con-
tracts, delicts or quasi- delicts is breached, the contravenor can be
held liable for payment of interest in the concept of actual and com-
pensatory damages. In this case, petitioner should be held liable for
payment of interest as damages for breach of contract of
carriage. The interest due shall be computed upon finality of the
SC’s decision at the rate 12% per annum until satisfaction.

In the present case, respondent heirs of the deceased are

entitled to indemnity for the death of Marie Grace which under
current jurisprudence is fixed at P50,000.00.